Methodology — How the Coast FIRE Calculator Works

Our Commitment to Transparency

Every number this site produces comes from a single, open set of formulas — no hidden adjustments, no "proprietary" black boxes. This page documents exactly how each calculation works so you can reproduce it yourself in a spreadsheet. The core math is covered by an automated regression test suite so the results stay stable over time.

All calculations run locally in your browser. We never see your figures.

Key Definitions

• Coast FIRE number — the amount you need invested today so that compound growth alone (no further contributions) reaches your full retirement target by your retirement age.
• Retirement target (the "nut") — the portfolio you need at retirement to fund your spending indefinitely.
• Real return — your investment return after inflation is removed.

The Formulas

1. Real (inflation-adjusted) return

We convert nominal return and inflation into a real return using the exact Fisher relationship, not the common shortcut of subtracting the two:

realReturn = (1 + nominalReturn) / (1 + inflation) − 1

Example: at 7% nominal and 3% inflation, the real return is (1.07 / 1.03) − 1 = 3.883%, not 4%.

2. Retirement target

We use the 4% safe-withdrawal rule — i.e. a 25× multiple of annual spending — as the default:

retirementTarget = annualSpending / withdrawalRate      (4% → 25 × spending)

The withdrawal rate is adjustable. A 3.5% rate produces a ~28.6× target; a 5% rate produces a 20× target. The 4% figure originates in the Trinity Study and William Bengen's 1994 research on sustainable withdrawal rates; it is a widely used planning heuristic, not a guarantee.

3. Coast FIRE number

We discount the retirement target back to today at the real return, over the years remaining until retirement:

years         = retirementAge − currentAge
growthFactor  = (1 + realReturn) ^ years
coastNumber   = retirementTarget / growthFactor

Worked example (age 30, retire at 65, $40,000/yr spending, 7% nominal, 3% inflation, 4% withdrawal):

• retirementTarget = 40,000 / 0.04 = 1,000,000
• realReturn = 3.883%, over 35 years → growthFactor ≈ 3.7942
• coastNumber = 1,000,000 / 3.7942 ≈ 263,555

We never round intermediate values — rounding happens only for display.

4. Required monthly contribution

If you haven't reached your Coast number yet, we solve for the level monthly contribution that closes the gap by retirement using the future-value-of-an-annuity formula at a monthly real rate:

monthlyRealReturn = (1 + realReturn) ^ (1/12) − 1

5. Barista FIRE — two honest models

Barista FIRE income is modeled two ways because the two cases give very different answers:

• Permanent income (a pension, Social Security, or part-time work kept through retirement): the portfolio only has to fund spending − income, so retirementTarget = (spending − income) / withdrawalRate. We still show the full target so the reduction is never mistaken for the whole nut shrinking.
• Temporary bridge (you quit full-time work now and go part-time only until retirement): the portfolio pays the annual shortfall during the bridge years, and must still reach the full retirement target at retirement. This costs more than simply coasting but less than retiring outright today. We never permanently subtract temporary income from the target.

Default Assumptions (all editable)

Limitations

This is an educational planning tool, not financial advice. It assumes smooth average returns and does not model:

• Sequence-of-returns risk — the order in which good and bad years arrive can materially change outcomes.
• Taxes, fees, and account types — pre-tax vs. Roth vs. taxable treatment is not modeled.
• Market volatility — real markets do not deliver a constant annual return.
• Changing spending, healthcare costs, or life events.

Use the scenario toggles to stress-test optimistic and conservative assumptions, and consult a qualified financial professional before making decisions.

Corrections

Found an error in our math or a figure that looks off? Please tell us — see our Corrections page. We publish fixes transparently.